Exciting 'Samba Dance'... Bio Stocks in High Spirits

Samsung Biologics Surpasses 760,000 Won... New High Again
Celltrion Group Stocks Also Rise One After Another... KRX Healthcare Index Hits Record High

[Asia Economy Reporter Minwoo Lee] Samsung Biologics' stock price is hitting record highs day after day. The orders received in the first half of this year have already surpassed last year's total sales, and with the dismissal of the arrest warrant for Samsung Electronics Vice Chairman Lee Jae-yong, concerns over 'owner risk' have eased. The Celltrion group stocks, considered the two major pillars of the bio industry, are also showing an upward trend, leading the stock market.

According to the Korea Exchange on the 11th, as of 9:30 a.m., Samsung Biologics recorded 742,000 KRW, setting a new all-time high. After breaking through the 700,000 KRW mark for the first time the previous day, it rose another 5.4% in one day, setting another record high. Compared to the yearly low of 352,000 KRW on March 19, it has surged by a remarkable 110.8%. Its market capitalization solidified its position as the third largest in the KOSPI market at 48.1681 trillion KRW.

Recently securing large-scale contract manufacturing agreements for biopharmaceuticals has been a positive factor. On the 8th, Samsung Biologics announced that it signed two contract manufacturing agreements worth 43.3 billion KRW and 246.2 billion KRW with a Swiss pharmaceutical company. Among these, the 43.3 billion KRW contract is a minimum guaranteed amount, and if the contractually guaranteed conditions are met in the future, the order amount could increase up to 400 million USD (approximately 476.2 billion KRW). This means that just in the first half of this year, orders have already exceeded last year's total sales of 710.5 billion KRW, making it possible to achieve 1 trillion KRW in orders.

The dismissal of the arrest warrant for Vice Chairman Lee also acted as a positive factor. On the 9th, the Seoul Central District Court dismissed the arrest warrant requested by the prosecution on charges including stock price manipulation during the merger process of Samsung C&T and Cheil Industries, and accounting fraud at Samsung Biologics. The court judged that detention was unnecessary as the basic facts were not sufficiently proven and the prosecution had already secured a considerable amount of evidence.

Not only Samsung Biologics but the entire pharmaceutical and bio sector is showing an upward trend. Shortly after the market opened that day, Celltrion recorded 285,000 KRW, up 6.1% from the previous day, marking its highest price since October 2018. Celltrion Healthcare also set a new yearly high at 113,700 KRW. Celltrion Pharm reached 140,600 KRW, approaching the all-time high of 142,500 KRW recorded earlier this month. Supported by the rising trend of these leading bio stocks, the KRX Healthcare Index, which includes major pharmaceutical and bio stocks, also rose to an all-time high. According to the Korea Exchange, the KRX Healthcare Index closed at 4,084.11, up 2.17% from the previous day, marking the highest level since October 2018. It has risen 16.6% this month, and compared to the yearly low on March 19, it has surged 86.7%. This level is comparable to the bio boom of 2017-2018.

In particular, unlike the past bio investment boom centered on individuals, foreign buying has recently become distinctly noticeable. From the 1st of last month to the previous day, foreigners net purchased 226.3 billion KRW worth of Celltrion and 188.1 billion KRW worth of Samsung Biologics. These correspond to the 1st and 3rd highest foreign net purchase sectors in the entire KOSPI market, respectively.

Myungseon Lee, a researcher at Shin Young Securities, said, "The pharmaceutical and bio sectors were not significantly affected by the economic downturn caused by the novel coronavirus (COVID-19). Rather, investment sentiment was attracted by expectations for the development of treatments and vaccines, and if substantial development results appear from the second half of the year, the upward trend in stock prices is likely to continue."

This content was produced with the assistance of AI translation services.